Today’s fuel price musings - $4 gas taking its time, but inevitable

Add comment May 21st, 2008

Rockford gas prices remain at $3.95 at many stations today, a week after they first hit that mark. But over that week, the average price for the metro area, the state and the nation all rose at least five cents. Meanwhile, since Friday, oil prices have risen 11.5 percent. It’s clear that gas retailers are waiting as long as  they can to hit the $4 mark here. But as their supply costs continue to increase, they’ll have to pass that on to the customer soon.

Linda Casey, spokeswoman for Marathon Petroleum - which operates several gas stations and a supply terminal here in Rockford - said gas stations are not fully passing the cost along to consumers. On May 13, 2005, oil was at $45.12 a barrel, according to the U.S. Energy Information Administration. Through May 16 of this year, oil prices jumped 166 percent. Gas prices in that period rose only 74 percent.

“We are truly not where gasoline should be based on what we’re paying for it,” Casey said. Basically, retail margins are dropping precipitously, so they’re making less profit on a gallon of gas. But if they raise the prices too much, they scare customers off, and they lose sales both at the pump and in the store.

If you see $4 regular unleaded, let me know at 815-987-1343 or tbona@rrstar.com.

Now on to the prices (data courtesy of AAA’s fuelgaugereport.com):

Gasoline: Rockford increased a third of a cent to a record $3.92 a gallon for the metro area. We’re up to fourth in the state, as Peoria ($3.91) and Bloomington ($3.90) slipped behind us. The state average dropped a tenth of a cent today, remaining at $3.98 a gallon and a fraction of a cent shy of that record. The national average rose almost a cent to a record $3.81 a gallon. Illinois has the fourth-highest gas prices in the nation.

Diesel: All prices here are records. Rockford increased a cent to $4.62 a gallon today, while the state average rose more than a cent to $4.61 a gallon. We still have the second highest diesel prices in the state. The national average increased about two cents to $4.56 a gallon. Illinois is tied with the 16th-highest prices in the country.